Custom Trading Computers Blog

Nearly all new video cards have multiple output for multi-monitor display. This is usually in one DVI or HDMI (digital) and one VGA (analog) flavor. If you are purchasing a video card with a DVI port and you are not running a digital LCD monitor, then you will need a DVI to VGA converter/adapter. Most DVI capable LCD monitors will have the capability of running VGA (analog), so you will not need to worry about VGA to DVI adapters (they are in the hundreds of dollars).

Another concern is the size of the on-board video memory and graphics processor. Memory on the video card is important to traders and yet isn’t important to traders at the same time. Video cards with more than 1GB WILL NOT help populate your charts faster or give you an advantage, nor will having the latest gaming video card.

The processor on the video card isn’t as important for traders as you may think. If the video card has multi-monitor support, chances are that the GPU is good enough. The most important aspect of the video card is compliance and reliability. Just because it will fit into a slot in your motherboard does not mean it will be reliable or work the way you want. There are hardware and software conflicts that can arise, which makes the video card selecting process very tedious. A general rule of thumb to guide you is to stay within nVidia or AMD Radeon chipset. NEVER mix the two as that is a recipe for disaster. Also try to stay with the same manufacturer if you decide to take the “do it yourself” approach.

This is another component that is nearly always overlooked but is extremely important to the performance and reliability of a trading computer. Most traders believe that they should get the highest capacity drive they can because they will be getting more for their money. The fact is that most traders don’t use more than 50GB of drive capacity, so what would be the point in getting a system with a 1TB hard drive. Similar to the memory/RAM is the quality over quantity approach. It isn’t how much capacity that is important, but the speed. When you access a file or write data to the drive, each drive has specific timings, in other words how fast it will do the task. Trading applications are constantly writing to the RAM and to the drive, so it is important to keep up with the demand.

To help meet the demand, I recommend Solid State Drives over Hard Disks as they are both faster and more reliable. You want to definitely stay with the latest interface technology called SATA III (serial ATA). I would not recommend looking into a SAS route, as the benefit to traders isn’t enough to justify the overwhelming cost. So again, you should think quality, not quantity. If you do indeed need storage space, you can always have an external large capacity hard drive or large capacity “secondary” internal hard drive for backing up and storing files that don’t get used often.

One of the most important components of a trading computer is the system memory (RAM). Many traders believe that they need as much RAM as possible to gain an advantage. This is only partially true. It is always wise to have more RAM than needed, but more important is the quality of RAM being used. Processor technology moves much quicker than any other technology in computers so many times “high-end” systems get bottle-necked by having slow RAM. There is no sense in having a processor that is so fast that it has to wait on the other components of the computer like the RAM.

For starters, traders shouldn’t have less than 8GB of system memory of any type of RAM. More important however is the speed of the RAM being used. There are $50 sticks of RAM and $150 sticks of RAM, with important reasons for the difference. When RAM leaves the manufacturing plant, each stick is tested and rated. Depending on the rating, it will be placed into specific categories and the higher-end better rated RAM is more expensive. The reason is simple: there are very few “high rated” RAM in a batch compared to the number of low performing RAM. Nearly all major computer manufacturers use the generic or low performance RAM in their systems to save on costs and keep their prices low to the end-user.

There is a need to examine some of the hidden parts of your trading computer system. This will influence what you should look for when researching and creating the perfect computer for your trading needs.

Motherboard

Chances are that unless you already know a lot about the actual different hardware components in a computer, you’ll never really need to do research on motherboards. The motherboard (main board) is the piece of the puzzle that connects everything together. It is the single most important factor of the computer, because like the other components, every motherboard is not created equal. The motherboard needs to be compliant with the other components. Thus the motherboard should be the first component you select. One processor may work on one motherboard but not on another. And, the same is true for the video cards, and RAM.

Processors

The two major processor manufacturers are Intel and AMD. Technology has come a long way. We now have multi-core processors which are extremely useful for traders. Multi-core technology is very similar to SMP (Symmetric Multi-Processor) AKA multi-processor technology in that you have multiple cores to work with on one single slab of silicon. Multiple-core processors are extremely useful for multi-tasking, which is why they should be in your scopes for your trading computer. Intel’s highest end multi-core processor product line is called the i7 while AMD’s is called the A10. Currently Intel’s i7 is the highest-end processor, outweighing the AMD A10 in nearly all categories and benchmarks, but it comes with a little premium in price.

Your trading computer should have a direct correlation to your trading plan. If you are an investor or swing trader, your computer needs are not as demanding as a scalper or day trader. It’s very similar to how your broker and your trading plan must be supportive of your particular trading style.

Your trading computer must be able to perform (and perform well) during the most crucial and hectic times of the day when you are putting on trades and following your trading strategies. The majority of brokerage software and charting applications take an incredible amount of computing power. However, the requirements on their websites seem low. Usually they specify only the minimum requirements needed to install the application. The minimum specifications listed by brokers and software vendors do not take into account all of the other variables that are different for every trader. What other applications do you have open; how many charts do you have open; how many order entry and level II market depth bars do you have; how many monitors do you have operating; and how many strategies and indicators do you have computing the data to transform them into easy to read visual and graphical formats.

Consider RealTick, a feature rich software vendor, as an example. On their web site you can read that the system requirements are a Quad Core and 4GB of RAM. How many traders do you know that would ever consider functioning with only 4GB of RAM.

Let’s consider a combined broker and software package for example, Tradestation. Their minimum system requirements are a single core 1.5GHz processor and 2GB of RAM. For a power user they recommend a multi-core at 3GHz or faster and 4GB or more. TradeStation defines a power user as one that uses any EasyLanguage studies, large amounts of tick or intraday data or an active trader. In other words anyone who is using their platform to follow the markets within the trading day. This is why you purchased TradeStation therefore everyone is a power user. There is a big difference between the minimum and power user requirements and then they indicate “or faster”. How much faster? Their job is to make sales and develop and grow new accounts. Your job is to configure and setup your trading computer system.

The bottom line of all this is that the total system must be able to perform as you wish and not be running into continuous constraints. First, you need to ask yourself what type of trader you are. How many trades do you go through on a monthly, weekly and daily basis? What is the average time frame in which you hold a position? And, how many different software applications do you run throughout the trading day? The answer to each of these questions will have a direct effect on what your needs are for your trading computer system.

Being a successful day trader is all about having as many advantages as possible. One edge that many traders are finding to be an absolute necessity is their day trading computer system.

There are only a few elements required for a trader to gain access to the market. First is a strategy and trading plan. Second is a broker to get in and out of the markets. Finally and most importantly is a trading computer to connect to the broker and to fulfill the trading plan.

Computers are extremely useful tools and have helped financial markets gain tremendous growth over the years by giving traders access to the markets. A computer is your eyes and ears into the markets and one of the most important aspects of your trading success. However, it is also usually the most overlooked aspect of trading.

Why is it that most traders overlook the computer aspect of their trading? Many traders believe that all computers are built the same and are essentially equal. Ultimately they will go with whatever is cheapest or on sale. It is worth asking yourself a few questions before you make a decision:

• Why did you pick the software that you did for your trading?
• Why did you pick the broker that you did for your trading?
• Why did you pick the seminar and books that you did for your trading?

The answers to the above questions will not be the same for everyone. The reasons may vary drastically between different traders. For some it may be price. For some it may be because of referrals from colleagues. And for others it may be because the features or information caught their attention. The fact is that all trading software is not the same. All brokers are not the same. All seminars and trading books are not the same. This applies equally to computers: all computers are not the same. Ultimately each of the above will DO the same thing, but each will DO it differently.

How well any given combination works for you will be specific to the needs of your trading strategies.

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